The Trump administration’s increasingly higher tariffs on Chinese imports are not a bad idea, Lloyd Blankfein said Tuesday.
“Tariffs might be an effective negotiating tool,” the former Goldman Sachs Group Inc. GS, +0.67% chief executive tweeted Tuesday night. “Saying it hurts us misses the point. China relies more on trade and hurts more.”
Tariffs might be an effective negotiating tool. Saying it hurts us misses the point. China relies more on trade and loses more. As in a labor strike where mngmnt & workers both get hurt, the process may demonstrate relative strength & resolve & where compromise needs to happen.
— Lloyd Blankfein (@lloydblankfein) May 14, 2019
In a follow-up tweet about an hour later, Blankfein — who now serves as Goldman’s senior chairman — said U.S. companies may ultimately benefit.
“US buyers may eventually switch their purchases to domestic or non-Chinese companies (and pay a bit more than now). Chinese companies lose the revenues. Not great but part of the process to assert pressure to level the playing field.”
As to who ultimately bears the tariffs cost: US buyers may eventually switch their purchases to domestic or non-Chinese companies (and pay a bit more than now). Chinese companies lose the revenues. Not great but part of the process to assert pressure to level the playing field.
— Lloyd Blankfein (@lloydblankfein) May 14, 2019
Blankfein’s comment that U.S. consumers may pay “a bit more” may ring hollow to some, as he had an estimated net worth of $1.1 billion as of 2017, according to Forbes.
On Friday, the U.S. raised tariffs on $200 billion of Chinese goods to 25% from 10%, and Trump has threatened to slap 25% tariffs on another $325 billion of Chinese goods — essentially everything China exports to the U.S.
The effectiveness of tariffs, and who they hurt the most, is a subject of debate in Washington and Wall Street alike.
“Pure and simple, this is a tax on the American consumer,” the U.S. China Business Council said in a statement last week. “More tariffs will not persuade either government to change their positions and will exacerbate the damage being done to American companies and farmers that do business with China,” the trade group added Tuesday.
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